Tough Times Ahead For Domestic Air Travel As Airlines Hit Survival Button, Set To Slash 250 Daily Flights
Amid flight cuts, experts warn airfares may rise by 10-20% on metro routes, 40% on Tier-2 sectors, 80% on last-minute ticket purchases, reports Surabhi Gupta.
Published : May 28, 2026 at 4:29 PM IST
|Updated : May 29, 2026 at 7:48 AM IST
New Delhi: India’s aviation sector is entering a difficult phase as rising fuel prices, geopolitical tensions and weakening demand force airlines to cut operations and rethink expansion plans. Aviation experts say airlines are now shifting into “survival mode” amid soaring operational costs linked to the ongoing West Asia conflict.
“The current aviation slowdown is not just about demand, it is a geopolitical fuel and airspace crisis reshaping airline economics,” aviation expert Ajay Jasra told ETV Bharat.
Tier-2 Sectors To Be Hit Hard, First
“Airlines are now prioritising survival and profitability over expansion, with Tier-2 connectivity likely to bear the biggest pressure,” he added.
According to Jasra, the impact will be most visible on secondary business corridors such as Nagpur, Indore, Raipur, Ranchi, Surat, Vadodara, Coimbatore and Visakhapatnam, where air travel depends heavily on SME movement and price-sensitive passengers.
“Routes like Nagpur-Bengaluru, Nagpur-Kolkata, Indore-Ahmedabad, Surat-Hyderabad and Vizag-Pune operate on thin margins and lack strong premium traffic. With fuel costs rising sharply due to the Iran conflict and airspace disruptions, airlines are beginning to trim weaker secondary routes,” he said.
The warning comes as Air India, Air India Express and IndiGo together prepare to withdraw nearly 250 domestic flights daily from June onwards. The move is expected to further tighten seat availability and push fares even higher during the summer travel season.
Air India will reportedly reduce nearly 22 per cent of its domestic operations during June and July. The airline currently operates around 500 domestic flights daily, meaning approximately 110 flights may be withdrawn every day. According to data from Air India, the airline plans to significantly reduce its domestic operations in June and July, with only 22,868 flights scheduled compared to 31,184 flights operated during April and May, a decline of nearly 27 per cent.
IndiGo, India’s largest airline, is also cutting domestic capacity by around 5 per cent, translating into nearly 110 daily flights. Air India Express will reduce around 10 per cent of its domestic operations.
Together, the three airlines account for nearly 90 per cent of India’s domestic aviation market.
Behind Doom & Gloom In The Sector
Industry experts say the cuts are being driven by a sharp spike in aviation turbine fuel (ATF) prices. Domestic ATF prices have risen nearly 25 per cent, while international operations have seen close to a 100 per cent increase in fuel-related expenses because of rerouting and airspace disruptions linked to the West Asia conflict.
Airlines have already raised fares by 40-50 per cent on several routes and imposed fuel surcharges of Rs 400-450. Experts now believe fares may climb further as flight frequencies reduce.
“Metro routes could see fare increases of around 10-20 per cent, while Tier-2 sectors may witness sharper hikes of 20-40 per cent due to reduced frequencies and limited seat availability,” Jasra said.
“Last-minute bookings could face spikes of 50-80 per cent, especially during weekends and peak summer vacation periods,” he added.
At the same time, airlines are also witnessing softer demand as travellers cut discretionary spending amid broader economic uncertainty. Sources within IndiGo indicated that the airline’s capacity cuts are linked not only to higher costs but also to weaker travel sentiment after the summer holiday rush.
Sanjay Lazar, aviation expert and CEO of Avialaz Consultants, said the slowdown had been anticipated months earlier.
“We had forecasted this situation on March 3 on various business TV channels and in print media, that Indian aviation would see a major slowdown as ATF prices rose, with at least two quarters of a nightmare for the industry,” Lazar told ETV Bharat.
“As we had said three months ago, the first green shoots, if at all this financial year, might only appear in the third quarter if the war normalises immediately,” he added.
'Hitting Survival Mode To Preserve Cash, Operating Margins'
Lazar said airlines are being squeezed by rising fuel and operational costs without proportional improvement in yields. “As the Government scales back the domestic setoff or discount to international ATF prices for domestic airlines, costs are rising without proportional increase in yields,” he said.
“Hence airlines will feel the pinch and reduce frequencies. This will cause prices to rise and demand to keep pace with reduced frequencies. There will be an impact on regional and Tier-2 and Tier-3 markets and some pressure even on metro Tier-1 routes,” Lazar added.
Calling the situation “quite dire”, Lazar said airlines are now focused on conserving cash and protecting margins.
“Airlines will have to go into war survival mode to preserve cash and operating margins and that’s exactly what we are seeing,” he said.
Apart from domestic operations, Air India has also reportedly scaled back several international routes. Flights on sectors including Delhi-Chicago, Delhi-Shanghai, Chennai-Singapore and Mumbai-Dhaka have either been suspended or reduced. Frequencies on routes such as Delhi-San Francisco, Delhi-Toronto, Delhi-Paris, Delhi-Melbourne and Delhi-Sydney have also reportedly been lowered.
Meanwhile, airlines have slowly started restoring operations on some West Asia routes as airspace restrictions ease across parts of the region, though Kuwait remains among the few destinations still facing operational disruptions.
Experts believe the coming months could remain challenging for the aviation industry unless geopolitical tensions ease and fuel prices stabilise. Until then, passengers are likely to face higher airfares, fewer flight choices and reduced connectivity across several smaller Indian cities.
Also Read:
- Air India To Cut 22% Domestic Flights Amid High Fuel Prices
- Relief For Airlines: Maharashtra Government Reduces VAT On ATF From 18% To 7%
- SC Suggests Rationalisation Of Airfares, Flags Discrepancies Across Airlines
- Air India To Cut International Flights Till July Amid Jet Fuel Price Surge, Airspace Curbs
